Right to acquire
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Home ownership helps to create mixed and sustainable communities. We will uphold your rights under the law to buy your home and help you to fulfil your expectations. Please be aware however that once you buy your home you will be fully responsible for all repairs, maintenance costs and insurances, and if you do not keep up payments on your mortgage and your home is repossessed you may find yourself homeless.
The right to acquire (RTA) is a scheme that gives eligible tenants of registered registered providers the legal right to buy their home.
If you became a new tenant with the Group after the date of transfer from Telford & Wrekin Council on 25th March 1999, you can only apply for the RTA. To qualify you must have spent three years as a public sector tenant of one of the qualifying landlords as listed in the Government’s ‘Right to Acquire: Buying Your Housing Association Home’.
Please also read the Homes and Communities Agency guide on the right to acquire. You can also find out more information in this booklet and this more detailed booklet.
You must live in your property as your only or principal home. You will not be eligible to claim the RTA if you:
- are an undischarged bankrupt or have a bankruptcy petition pending against you;
- are subject to a formal creditor’s agreement made under the Insolvency Act;
- live in a property in certain designated rural areas;
- live in tied accommodation;
- live in a home designed with special features suitable for people with disabilities;
- live in Sheltered Accommodation or homes suitable for occupation by the elderly;
- live in a home where your landlord has published notice of its intention to demolish the property within five years or served a notice that it intends to demolish within two years; or
- live in a shared ownership property.
The above list is not exhaustive.
Qualifying period
For all new tenants with the Group after 25 March 1999 the qualifying period will be three years and you will qualify for the RTA scheme only.
Discount entitlement
The maximum amount of discount available if you qualify for the RTA is £9,000.
Antisocial behaviour
A RTA can be suspended or ended if a tenant, or their household or visitors, is / are engaging in antisocial behaviour or threatening to do so.
How do I apply for this scheme?
If you wish to apply for the RTA, please contact us as above to get an application form RTA1, or download it here.
Buying a property through the RTA scheme is similar to that as described for PRTB so you may wish to also read the information given at the beginning of this leaflet.
Differences between the Preserved Right to Buy and Right to Acquire Schemes
The most important difference between the two schemes is the way in which the discount is awarded.
The discount given for the RTA scheme is a fixed amount published by the Government. The current set discount for this area is £9,000. This is the amount you will have subtracted from the open market value of your property. For example, if your property is valued at £85,000 the discount for this area of £9,000 will be deducted. This will then give a discounted purchase price of £76,000. You can appeal the valuation in the same way as for the PRTB scheme.
Points to note for both the Preserved Right to Buy and the Right to Acquire Schemes
Improvement works
Once you submit a PRTB / RTA application form your home will not benefit from any of our major improvement schemes.
Costs involved in buying your property
You are not charged by the Group for any work that we carry out on your behalf when you submit a PRTB / RTA application, for example, the valuation of the property. You will however need to pay other organisations for at least some of the following.
Getting a mortgage
It will be your responsibility to get a mortgage or alternative finance to buy your property. You may wish to seek independent financial advice. There are different types of finance to help you to buy a property including, for example, funding options available in accordance with Sharia Law.
If you are getting a mortgage your finance provider must be an ‘approved lender’. An approved lender is one that has permission under the Financial Services and Markets Act 2000 to enter into mortgages as a lender.
Stamp duty
This is a tax imposed by the Government on the sale of any property within certain price brackets. Further information on current rates can be obtained by visiting www.gov.uk/stamp-duty-land-tax-rates.
Legal and survey fees
You will need to contact a solicitor to obtain an estimate for legal fees.
Survey fees will depend on the type of survey you decide to have done. The survey carried out by your mortgage provider, if you have one, is for their benefit. This is so that they can be sure that the value agreed is enough to guarantee the amount of mortgage you are asking to borrow. The fee for both of these will be your responsibility.
You may decide that you would like to have a more comprehensive survey carried out. If so, you will need to contact a local firm of surveyors and arrange a fee with them. Please be aware that if you cancel your application to buy you will still have to pay all the above fees. Before you buy, it is recommended, by the Department for Communities and Local Government, that you obtain an independent survey from a qualified surveyor.
Mortgage arrangement fees
These will be entirely your responsibility and vary from provider to provider.
Responsibilities of home ownership
Once the purchase of your property has taken place, you will become a homeowner. You will then be solely responsible for meeting continuing regular payments. These payments will include some or all of the following:
Mortgage repayments
Failing to meet your mortgage repayments could result in the repossession of your home by your mortgage provider. You may then become homeless.
Building and contents insurance
This will be your responsibility. However, if your property is an apartment or maisonette, building insurance is included in the service charge administered by the Trust. You will still be responsible for obtaining your own contents insurance.
Life assurance and Mortgage Payment Protection Insurance
Both are optional. The former pays off your mortgage if you die during the period of your mortgage and the latter covers the payment of your mortgage if you are made redundant or on becoming ill. This should be discussed with your provider.
Annual service charges and ground rent
Both these are payable annually and are always applicable if your property is an apartment or maisonette and in some cases, if it is a house, for example, grass cutting. Ground rent is payable for apartments and maisonettes. We manage certain services on your behalf for example lift maintenance and communal lighting. Your charges pay for these services and you are invoiced accordingly.
Regular maintenance costs
Your property will also need to be kept in good repair and you will be responsible for all repairs and maintenance to your home. These can be very costly and could include, for example, central heating servicing, external painting to the outside of your property and in the case of apartments and maisonettes, service charges as mentioned above.
Major repairs
Such items as water drains, boiler replacement, electrical repairs and rewiring will be your responsibility.
Remember, unlike your rent, your mortgage repayments do not include building insurance and a free repairs service. Once you buy your home, these are your responsibility.
As a homeowner you will not receive any Housing Benefit to help with your mortgage payments.
If you are elderly and own your own home, its value may be taken into account when assessing whether you are eligible for financial help with the cost of residential care.
You must also be aware of the risk of repossession of your home and potential homelessness if you do not maintain your mortgage repayments.
After You Buy Your Home
Repayment of discount
If you wish to sell your property and you applied to buy it after 18 January 2005, the period in which you will be required to repay discount entitlement is five years. The discount that could be reclaimed will be calculated as follows and will take account of any increase in the value of your home.
- If sold within a year, 100% is repayable.
- If sold within two years, 80% is repayable.
- If sold within three years, 60% is repayable.
- If sold within four years, 40% is repayable.
- If sold within five years, 20%.
- No repayment is required after five complete years, though your property must be offered back to the Trust for the first ten years after purchase in any event.
If you sell your property within this five year period, the amount of discount to be repaid will be a percentage of the resale value rather than the value at the time you purchased the property.
For example, if your home was valued at £80,000 when you bought it from us and purchased through the PRTB scheme and you received a discount of £20,000, this means that your discount was 25% of the value.
However, if your home is valued at £100,000 when you wish to sell it and you sell within the second year of purchase, you will have to repay £100,000 x 25% of the value discount x 80% which is £20,000.
For RTA if your property was valued at £90,000 and you received the fixed discount at £9,000 this represents 10% of the property value. If, when you sell the property, it is valued at £120,000 and you sell within three years of purchase, then the amount to be repaid will be £120,000 x 10% discount x 60%, which is £7,200.
Under either scheme, if you choose to resell your home within ten years you must first offer it back to the Trust.
If the property you have bought is an apartment or maisonette, you will be required, under the terms of your lease, to pay a service charge to cover the cost of communal repairs, major works and services provided. You lease everything within the internal walls of your apartment, and will be responsible for repairs to items within your home.
The Group is still your landlord and owns the outside structure of blocks and the common parts / areas surrounding the apartments / maisonettes such as the gardens, and so on.
Warning
The Group, together with other Registered Providers, are concerned that tenants do not always receive good advice when they ask private companies and individuals for help in buying their homes. There have been problems with door-to-door salesmen giving out wrong information and advice.
Some tenants are being asked to pay a lot of money for things that we will do for free.
Be sure that any advice you are getting on the PRTB and RTA schemes is correct. It could be that you are being persuaded to do something that benefits others rather than yourself. If you need information on any aspect of the PRTB or RTA scheme, contact us first.
If you are approached by a person or company offering to help you buy your home, check:
- what exactly you are paying to them;
- what they are going to do for you; and
- talk to us before signing up to any deal.
Companies cannot negotiate deals on discount entitlement or house prices.
The Government publish a leaflet called ‘Want to make your home your own?’ This is available from the Department for Communities and Local Government, along with information on the PRTB, visit www.righttobuy.communities.gov.uk
This information is to be used as a guide only.
It is a general summary and is not to be relied on as a full interpretation of the Housing Act.
If there are any specific matters that you need advice on you should contact either us or seek your own independent advice.
Right to Acquire
The Wrekin Housing Group Ltd
Colliers Way
Old Park
Telford
TF3 4AW
Phone: 01952 217100
Email: enquiries@wrekin.com
We are committed to giving everyone equal access to information. If you would like this information in another format, please phone 01952 217100.